UPDATE 2-Grande Cache Q1 sales volume doubles, shares up

* Q1 sales volume up 104 pct

* Raises FY10 sales volume outlook

* Says added 40 jobs to increase production

* Shares up about 8 pct (Adds details, updates share movement)

July 14 (Reuters) - Canada's Grande Cache Coal Corp (GCE.TO) reported a more than two-fold jump in its first-quarter sales volume, driven by strong demand from China, and raised its fiscal 2010 sales volume outlook, sending its shares up almost 8 percent.

"The increase (in outlook) is due to a higher level of spot sales experienced to date, together with a modest recovery in demand from traditional customers compared to the latter part of fiscal 2009," the company said.

For the three months ended June 30, the company sold 0.51 million tonnes of metallurgical coal, up from 0.25 million tonnes a year ago, as it was helped by a significant increase in spot sales, primarily into the Chinese market.

Grande Cache, which produces metallurgical coal for the steel industry, boosted its fiscal 2010 sales volume outlook to between 1.3 and 1.5 million tonnes of coal, from its prior estimate of 1.2 to 1.4 million tonnes of coal.

The company said it had taken steps to increase its current level of production to meet anticipated sales volumes for 2010 and added that it expects average sales price for the year to be in the range of $115 to $125 per tonne.